Domestic Tourism: Trends & Opportunities
Trends & Opportunities
The domestic tourism sector has provided strong support for the national industry, but it is still only focused on a limited portion of the market by offering the same ‘traditional' products to the same type of tourists that have dominated expenditure in this area for the past 50 years. Product providers assume that their existing products will also appeal to new entrants in the discretionary spending economy, when, in fact, they have very different needs. These travellers are not defined by racial demographics but are rather differentiated by their demand for new and different tourism experiences which are not covered by the current product set.
Factors that influence travel choices for emerging local tourists – often high-earning and high-spending – include family size, value for money, food and beverage options, activities that appeal to their interests, and accessibility.
The 2016 Domestic Tourism Survey conducted by Statistics South Africa shows that domestic overnight trips decreased by 11% over a year since 2015, to 42.8 million trips. Of these, only 7.4 million were leisure trips – a decrease of 13% from 2015.
The increase of 23% for domestic tourists travelling by air in 2016 is encouraging, though this still represents only 1.5 million trips out of the 42.8 million domestic trips in total.
Trips categorised as ‘visiting friends and relatives' (VFR) is a potential area to capitalise on. Although these trips decreased by 9% from 2015 to 20.5 million trips in 2016, there is still significant opportunity for tourism operators to tap into, by offering products that would appeal to VFR travellers, or even to convince them to take a leisure holiday instead of a VFR trip.
This does not mean that existing businesses should give away a portion of their market share or products. Instead, there is scope for new product lines and suppliers to enter and expand the market. Importantly, this would also serve to diversify the composition of the tourism industry ownership, which is crucial for the sustainability of the sector.
For the past two decades, we have relied on feeding the informal – mostly crafting – sector into the more formal tourism supply chains, to achieve diversification of ownership and products, but we need more than this. I see a clear opportunity for small- to medium-sized black-owned businesses – ranging from adventure operators to hotel and resort groups – to grow the available product set and to make the domestic tourism market accessible to more consumers. If the industry manages to grow in this manner, it would go a long way to making domestic tourism even more resilient.
It is critical for South Africa to strengthen the foundations of the local tourism industry, as this provides important support to the international tourism sector. In order to achieve this, all stakeholders need to see the value in the big picture – for the economy – in expanding the product offering, the ownership landscape, and the consumer base.
We need to see proactive efforts from the government by offering more land and space for new entrants, as well as existing suppliers, to allow and welcome new product providers to add products that cater to the underserved audience, without compromising existing supply lines or crowding out ‘traditional' tourists.
In conclusion, the local domestic tourism market is ripe for meaningful change which goes beyond focusing on improving B-BBEE scorecards. It is robust enough to allow for expansion that would cater for all types of tourists in different market segments, all over the country. About the Author: Lee-Anne Bac is the Director: Advisory Services and Leader: Real Estate and Construction at Grant Thornton
For more information visit www.grantthornton.co.za
South Africa’s domestic tourism industry has the potential to contribute significantly more to the economy if it manages to expand the industry so that it caters for everyone in the country rather than just focusing on traditional international tourists.